CMS Case Study

Summary of Potential Strategies - 9/30/2021

STRATEGY

EXPECTED RESULTS

RISKS

1. Deposit/Funding Strategies :

 Discuss @ ALCO.  Increased NII

 Discuss @ ALCO.  Loss of deposits.

 Retail & Wholesale

$467,000-$847,000 first year.

- Another strong quarter for NMD growth. - New accounts/relationships? - Revisit betas on Prime accounts vs. traditional 23% of Prime (see alternative scenarios modeled). - Discuss timing of potential deposit rate increases when rates rise and ability to lag betas in rising rate scenarios (non-linear betas). MODELED: 6-month delay in raising rates. - Discuss FHLB 10/non-call 6 months advance at 1bp (excluding dividend impact)!

2. Lending :

 Discuss @ ALCO.

 Credit.

 90-day forecast. 2022 budget.

 Liquidity.

- Competitive issues in different portfolios? - Comfort level with fixed rate lending. - Update on residential strategy. - Prepayment penalties still important!

 Discuss @ ALCO.

Cloyd Bank & Trust - Page 36